Taming the "Banana Republic
The United States in East Timor
by Ben Moxham
Z magazine, January 2005
In March of last year, a USAID-funded
kid's book released in East Timor provoked outrage. Faty and Noi
's Adventure to Parliament was an International Republican Institute
(IRI) book teaching Timorese kids about democracy. All the characters
in the book were drawn as monkeys, including the government leadership,
who appeared on the front cover like some line-up of suspected
criminal apes. Describing someone as a monkey is particularly
tasteless in Timor. "This is definitely an attempt to humiliate
us," said Lu-Olo, the Fretilin party head of Parliament,
who has spent most of his life dodging U.S.-manufactured bullets
as an independence guerilla.
Parliament passed a resolution condemning
the book and it was withdrawn, but not without a very public fight.
The responsible IRI project staffer quarreled with President Xanana
Gusmao-the revered resistance leader-for withdrawing his support
for the publication. IRI complained that the books had cost $15,000
to print and banning it was a denial of their right to free speech.
IRI claimed that they had consulted broadly on the book, which
the government contests. Regardless of where the truth lies, commentators
are right to point out that "monkey-gate" was a convenient
political distraction from corruption allegations pitted against
the government at the time. Yet the racist and condescending tone
of the book and brash IRI response is symbolic of U.S. actions
in Timor and around the world.
In Timor, USAID bankrolls most of the
non-government media and many civil society organizations working
on legal reform, media training, and policy research among others.
It is, however, the "democracy promotion" agencies funded
by the quasi-U.S. governmental National Endowment of Democracy
(NED) that have attracted the most attention. The IRI and the
National Democratic Institute (NDI)-the respective foreign policy
wings of the U.S. Republican Party and Democratic Party-are the
key tools in containing and directing the political agenda in
countries, like Timor, undergoing "transition."
At best, this can be "dangerous whistling
in the dark," as historian Eric Hobsbawm describes it. For
Hobsbawm, it can be a naïve and self-interested attempt at
imposing a U.S. ballot-box brand of democracy that has little
local resonance. At worst, it is political meddling. It was NED
groups that infamously stirred up the failed coup in Venezuela
and the successful one in Haiti. IRI are also openly pitted against
Hun Sen's government in another "reconstructing" country,
IRI, in particular, have been training
Timor's fledgling political parties in the tricks of the trade.
Through circumstances both deliberate and coincidental, they have
ended up helping only the Washington-friendly opposition. While
IRI see themselves as "life support" for the country's
opposition, Fretilin, the ruling party, see them as interfering.
In response, they enacted a repressive and open-ended immigration
law banning foreigners from "engaging in political activities."
Many see it as a direct response to IRI activities. Fretilin even
threatened to deport IRI staff under the law after IRI sponsored
an opinion poll that they felt was worded to deliberately undermine
For the opposition parties it is a tricky
bind. Despite reservations they may have with the U.S., USAID
is offering them needed resources at the same time the Fretilin
government is trying to silence them. A prominent example was
the suspension of 32 civil servants for attending a meeting of
the rival Partido Democratica (Democratic Party) in Suai district.
They were accused of skipping work, yet the meeting was held on
Many individual USAID projects are harmless
and sometimes sorely needed, e.g., NDI's lobbying to ensure civilian
control of the military. But step back and what emerges is a U.S.
political hegemony over civil society spread by USAID's check
book. From generous project grants to prominent positions in USAID-backed
NGOs, the U.S. is grooming a set of domestic political elites
and subtly co-opting the radicalism of the independence movement.
In the fortress-like U.S. embassy, now
tastelessly located in the former Indonesian governor's house,
an "unnamed diplomatic source" discusses the underlining
tension between the U.S. and Prime Minister Man Alkatiri's government.
"Timor is at a crossroads...! feel that Alkatiri is trying
to follow the Malaysian model of development," with the attendant
"weakening of democratic institutions," he comments.
Yet Alkatiri's Mahathir-style posturing
is mostly just that. The government is on the tight leash of an
international donor community that continues to wield quasi-sovereign
power. However, even with its limited space for maneuver, the
government has frustrated U.S. attempts at policy engagement,
especially in the justice sector, which the U.S. views as incredibly
weak. If the standoff continues, comments my diplomatic source,
"We will direct our resources into other areas such as building
civil society and increased support for IRI and ND!."
Structural Adjustment of Independence
The irony of promoting democracy in Timor
is that all major decisions since independence have been made
by a coterie of U.S., international donors, and Bretton Woods
institutions. State utilities have been partially privatized.
The IMF effectively controls a non-interventionist central bank.
The entire economy has been thrown open with all tariffs, save
on luxury goods, set at 6 percent. The government, restricted
to 17,000 staff under structural adjustment-style conditionalities
and a miserly $75 million budget, is unable to make any impact
on living standards beyond the city of Dili. The Ministry of Agriculture,
for example, has an annual budget of just $1.5 million, yet 85
percent of the country relies on agriculture for their livelihood.
In contrast, the former Indonesian occupiers had 33,000 people
on the government payroll managing $135 million in 1997. That
was just to administer what was then a distant province, not a
Radical liberalization of the economy,
combined with the inflationary pressures of a well-funded international
donor elite, has rendered most Timorese economically unviable.
With just under half of its 925,000 inhabitants living in "extreme
poverty" as defined by the UN, Timor is already the poorest
nation in Asia and getting worse. For each of the last 2 years
the economy has shrunk by 2 percent and a further decline of 1
percent this financial year is predicted. At the same time, the
population has grown by 17.5 percent since 2001, adding at least
15,000 people to the workforce each year. Add these pressures
together and even the IMF concedes that this is "reinforcing
widespread poverty and serious underemployment."
With the national budget already facing
serious shortfalls, it's hard for the government to get the courage
to deviate from donor policy orthodoxy-especially as they fund
a little under half of it. "Put bluntly," opines a U.S.
Congress memo on activities in Timor, "it seems likely that
assistance levels will decline if East Timor's government pursues
economic or budgetary policies which were unacceptable to donors."
At the May 2004 donors' meeting the IMF
summarized donors' solutions to Timor's economic malaise: "Development
of a dynamic private sector is key to attaining higher economic
growth, generating increased employment opportunities, and alleviating
poverty." It's a pervasive and unchallenged idea in Timor.
Looking at Timor, with its crumbling roads,
UNHCR tarpaulin-covered markets, low-skilled workforce, and comparatively
high-waged economy, talk of creating "enabling environments"
for the private sector or attracting Foreign Direct Investment
(FDI) looks like a dance to the rain gods. "The start up
costs here are 30 percent higher and the operating costs are 50
percent higher than the rest of the region," says Jose Goncalves,
the U.S. government-funded Senior Investment Advisor with the
Ministry of Development and Environment. "There aren't too
many areas for investment in this country," he adds, pausing.
Low levels of investment are a common
story among the Least Developing Countries (LDCs). Indeed, according
to the United Nations Commission on Trade and Development (UNCTAD),
the LDCs in Asia experienced a decline in annual FDI investment
from an average of $786 million from 1995 to 1999 down to just
$339.7 million by 2002.
Yet the U.S. continues to push heavily
for foreign private sector-led growth. It is funding a number
of studies on FDI promotion, agribusiness development, a finance
sector framework, and developing a land law regime friendly to
the private sector. My unnamed diplomatic source sees this last
policy as Timor's only option to attract investors. "The
government has tons of land, about two thirds of the country,"
he proclaims, "some of which of course is tied up in Adat
[traditional title]. This is one incentive they can offer. They
can give out land for FDI."
Assuming this strategy succeeds, and whole
villages don't mind being thrown off their land, will it actually
be beneficial? UNCTAD, in their latest report on LDCs has asked
why "there is no guarantee that export expansion will lead
to a form of economic growth that is inclusive." UNCTAD's
former secretary-general Rubens Ricupero blames what he labels
"enclave-led growth" and paints a classic picture of
colonial capitalism: "A relatively rich commodity-exporting
sector, well connected to roads and ports and supported by ancillary
services, existed side by side with large undeveloped hinterlands
where the majority of the population lived." If donor plans
for building an export processing zone (EPZ) in the town of Baucau
happen, Ricupero's description is probably the best Timor can
hope for. However, the "build it and they will come"
faith behind EPZ promotion is a gamble that has failed in other
Yet with a decent flow of oil revenue
expected over the next 20 years, Timor has one chance to "cross
the desert" of underdevelopment, as Goncalves puts it. It
is a critical choice. Does Timor gamble on EPZs or instead use
the revenue to strengthen rural communities and economies and
create mutually beneficial linkages between domestic and international
markets? Is it even a choice Timor has the political space to
The grandeur of U.S. plans to spread democratic
capitalism over the world is bettered only by Pentagon delusions
of achieving global "full spectrum dominance." Indeed,
the two crusades are intimately and contradictorily linked, as
the residents of Fallujah can attest.
While Timor isn't being bombed into freedom
by the U.S., the frequent visits of U.S. warships and Marines
to Dili place Timor under the U.S. military umbrella. It's a tricky
bind for Alkatiri. The U.S. military presence reinforces an already
distasteful U.S. "democracy promotion" agenda, yet also
provides a perceived counter to an Indonesia that looms large
in all of Timor's foreign policy calculations. Dili recognizes
their vulnerability towards their former oppressors across the
border. Jakarta would only have to halt imports of instant noodles
into Dili to starve them.
But the U.S. could be staying for more
than just the weekend. One of the most persistent rumors in Diii
is U.S. plans to build a military base on Atauro Island, about
20 km north of Diii. The official U.S. response is denial: "We
have no interest in Timor whatsoever -zero," responds my
unnamed diplomatic source, making a zero sign with his left hand.
Many well placed government sources privately
contradict this, as do the U.S.' s own historical strategic interest
in the submarine passages lying north of Timor. This was a key
reason for the U.S. giving Suharto the green light to invade Timor.
The U.S. needed "the continuing good will of the Suharto
Government," to guarantee "American security interests,"
writes John Taylor. "Paramount in these interests was the
use of the Ombai-Wetar Straits for deep-sea submarine passage."
These straits have increased their significance for the Pentagon
since the recent identification of Southeast Asia as a zone of
"instability." The Straits are also critical trade routes,
especially for Australia and New Zealand who are rumored to be
investigating setting up facilities.
For Timor's Independence Day on May 20
this year, the navy ship USS Vandegrift anchored off the coast
of Dili to pay a diplomatic visit. Republican-appointed Ambassador
Joseph Rees commented on why the ship's visit was important: "Timor
Leste wants a close relationship with the U.S., not only because
they believe it enhances their security, but also because they
share our commitment to freedom and democracy."
But the hundreds of Timorese that protested
two months earlier outside the old U.S. embassy on the first anniversary
of the U.S. occupation of Iraq didn't share what Rees's definition
of freedom or democracy meant in reality; nor do the Timorese
who have long lamented the U.S. backing of Indonesian atrocities
committed against them.
One body that could have deterred or perhaps
punished such genocide-had it been formed earlier-is the International
Criminal Court (ICC). Created in 1999, it is designed to catch
those committing crimes against humanity who would otherwise slip
through the gaps of politically compromised national jurisdictions.
This is exactly the problem currently facing both the Indonesian
and Timorese legal systems responding to the atrocities of 1999.
The U.S. has waged a campaign to undermine
the ICC. It has been twisting the arms of dozens of poor and weak
nations into signing Article 98 "non-surrender" agreements
committing them to never handing over U.S. citizens to the ICC.
In the case of Timor, the U.S. didn't twist Dili's arm, they broke
it. "If Timor hadn't signed those agreements then we would
have pulled out any military from here," comments the diplomatic
source. U.S. Secretary of State, Cohn Powell, went further, writing
to the incoming government in April
2002 urging them to sign the agreements,
otherwise the U.S. Congress would find it difficult to continue
giving aid. According to diplomatic sources in New York, the U.S.
engaged the Timorese government in some "special coaching,"
as Anett Keller puts it, "during the weeks preceding East
Timor's signature to the bilateral agreement." In June 2002,
they threw a tantrum at the UN Security Council, threatening not
to replace their three UNMISET (UN Mission for East Timor) members
if they couldn't secure immunity from the ICC for all UN peacekeeping
The Timorese quickly buckled. Timor's
strongly pro-U.S. Foreign Minister Jose Ramos Horta, perhaps needing
U.S. backing for a suspected stab at the UN's highest job, signed
the ICC Article 98 exemption and a Status of Forces Agreement
(SOFA) on October 1, 2002. One year later, Timor's Council of
Ministers approved this Article 98 with the United States, binding
East Timor to never surrender or transfer, "current or former
government officials, employees (including contractors), or military
personnel or nationals" of the United States to the International
Criminal Court. Forcing a nation that barely survived genocide
into a campaign to undermine the ICC is a truly tragic example
of who calls the shots in the world's newest nation.
In addition, the SOFA gives diplomatic
immunity to U.S. military personnel in Timor from any criminal
matter and an economic agreement between the two governments also
exempts U.S. staff from paying taxes and bothering with immigration
requirements. It also makes their property "inviolable"
and makes them immune from civil suit. For all the U.S. complaints
about Timor's justice sector with its weak "rule of law,"
U.S. citizens seem to be exempt from every law in the country.
The Quiet Americans
Pressured on the issue of military bases,
the unnamed diplomatic source adds, "Timor is just not a
factor in the strategic thinking of the United States. It is really
a question as to what Timor becomes. If it is a failed state like
PNG, then it has no importance to the United States: we'll walk
away. If it is a prosperous and democratic state then it could
have important symbolic value for the region, 'Look here, Timor
did it, so can you'." But which of those options are U.S.
actions contributing to?
Perhaps Timorese elites can avoid failed
statehood by walking the fine line between placating local constituents
while following the flawed prescriptions of their international
overlords. But there is a more likely scenario. Imagine an anxious
Prime Minister Alkatiri at his office desk, painstakingly searching
for more funds in his flimsy national budget to silence the din
of angry protestors outside his window. Crowding out his thoughts
and his policy options would also be the groundwork laid by the
Quiet Americans-no control over a dysfunctional economy, Venezuela-style
moves by the IRI, and that U.S. warship with its 1,800 Marines
sitting in Diii Harbor. On deck unnamed U.S. officials are no
doubt muttering something about yet another "failed state.
Ben Moxham works for Focus on the Global
South (www. focusweb, org), a research and advocacy organization
based in Bangkok.